Vodafone asks India court to halt spectrum auction

Vodafone has petitioned an Indian court to stop the government from auctioning off rights to the cellphone spectrum it now uses for 18.7 million customers in three cities, the company said Wednesday.

India's second-biggest mobile phone operator filed the petition in the Delhi High Court, saying the planned auction of 900 MHz spectrum in New Delhi, Mumbai and Kolkata is illegal because its current license allows it to renew for 10 more years when it expires in 2014.

The legal action is the latest dispute between India's government and the British telecoms giant, which is contesting a $4.4 billion tax bill.

A court ruling in the spectrum dispute could delay the government's wider plan to auction off bandwidth in three frequencies on March 11. The auction is intended to allow new companies into the mobile phone market and raise several billion dollars to help plug a growing government budget deficit.

"Vodafone believes that it is entitled to a fair and reasonable extension of its license," the company said in a statement, arguing that it has already invested heavily in infrastructure for the bandwidth it uses.

Vodafone said it has invested some 500 billion rupees ($9.2 billion) to build its existing networks in India and that actions to "arbitrarily withdraw" its licensed spectrum are against the public interest because it could disrupt service to millions of mobile phone users. Vodafone's existing customers in Mumbai, Kolkata and New Delhi markets represent 13 percent of its total 150 million customers in India.

Department of Telecommunications officials could not be reached for comment Wednesday.

The auctions are planned for the 900 MHz frequency that Vodafone currently uses, as well as 1800 MHz and 800 MHz frequencies.

Vodafone is one of several major mobile phone players in India already using the 900 MHz frequency slated for auction. Others that could lose out include Bharti Airtel — the country's largest mobile phone provider — Idea Cellular and Bharat Sanchar Nigam.